Novice traders start their trading careers with great expectations. They start daydreaming without knowing the big challenges associated with the currency trading business. You may have extensive skills in running a traditional business but in the options market, you have to specialize in a few sectors. Without taking the proper precautions, no one can become a successful trader. You might lose your capital due to a lack of knowledge.
Trading can be done in the higher or the lower time frame. Lower time frame trading is a bit more complex and it requires intense skills. Unless you become good at technical and fundamental analysis, you will have a hard time with the lower time frame trading strategy. However, if you systematically learn things, you may expect to become a professional scalper within a short time. Let’s get into the details.
1. Learning the basics
You need to spend a decent amount of time learning the basics. The majority of traders try to master a premium scalping strategy without knowing about the support and resistance level. Taking such actions usually leads to big losses. You need to understand the technical and fundamental details of the market. For instance, just by seeing the economic calendar, you should be able to determine the market condition.
Unless you become good at fundamental analysis, you might end up executing the trades during the FOMC press conference. During the FOMC press conference, the market becomes extremely volatile and it becomes really hard to execute the trades even after acquiring strong technical knowledge.
2. Curating your trading environment
Being a new scalper, you need to be extremely careful with your asset selection process. You should be trading the market with the exotic pairs as the price movements are very unstable. Visit the website of Saxo and learn more about the major currency pairs as it will give you a decent idea about the stable price movement. Once you learn the asset selection process, you need to focus on your trading platform.
Choose a reliable broker so that you can execute trades without facing any major technical problems. Since you will be taking trades in the lower time frame, it is also important to consider the spread. Ignore the trade signals when the spread is high as you have to set a higher profit target to ensure a proper risk to reward ratio factor.
3. Use the premium indicator
The professional scalper prefers to use the premium indicators as it helps them to make the right decision without having any major trouble. However, if you intend to use the default indicators associated with the professional trading platform, you need to learn its functions in the practice trading account. Stop relying on the indicators data without knowing the proper functions of these tools.
It might take a while to get used to the different types of indicators but it is the only feasible way by which you can become good at using the indicators. Once you learn its functions properly, you may integrate the indicators into your existing trading strategy and consider it as your primary filter tool.
4. Managing the trades
Professional scalpers have excellent trade management skills. Without having strong trade management skills, you should never switch to the lower time frame trading strategy. You should have complete control over your emotions as it will stop you from overtrading the market. When you lose a trade, make sure you do not start revenge trading. Use a simple approach and revaluate your risk exposure level. Instead of taking more than 2% risk, you may reduce the risk factors.
Even when using proper risk management techniques, you may have to deal with a losing day. Accept the losing trades and try to find the faults in your system. Start your next trading day with a fresh mind and try to find the best possible trade signals in favor of the trend.
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.